The National Company Law Tribunal has allowed the scheme of arrangement between Reliance Industries Ltd’s Viacom18 Media Pvt. Ltd and Walt Disney-owned Star India Pvt. Ltd, paving the way for one of the biggest mergers in India’s media and entertainment sector.
A Mumbai bench of the NCLT led by Justices Anu Jagmohan and Kishore Vemulapalli on Friday held that “the Scheme appears to be fair and reasonable and is not violative of any provisions of law and is not contrary to public policy”.
Earlier this week, the Competition Commission of India also granted its approval for the merger deal. The competition watchdog approved the deal, which was first disclosed in February, only after both sides suggested some modifications to the original transaction structure. The CCI did not reveal the modifications proposed by the two parties.
Reliance is expected to secure the approval of the ministry of information and broadcasting as well, and begin the integration phase before October, as Mint reported on 28 August.
Also read | Mint Explainer: All you need to know about the $8.5-billion Disney-Reliance merger
As a part of the scheme, Reliance Industries and its affiliates will hold 63.16% of the combined entity, which will house two streaming services and 120 television channels. Walt Disney will hold the remaining 36.84% in the combined entity, which will be India’s largest media house.
“The Scheme is being proposed for Viacom18 to remain the holding company of the media operations of RIL group by transferring the Media Operations Undertaking and Jio Cinema Undertaking to Viacom18 WOS; and combining V18 Undertaking with the business of Star India,” the tribunal said in its 22-page order.
“The proposed combination will result in cost reduction due to synergies, thus creating value for shareholders of Viacom18, RIL group and Disney group,” it added.
Also read | The Reliance-Disney merger is great for them. But will it be for consumers?
Mint reported earlier that Reliance Industries would inject 11,500 crore ($1.4 billion) into the joint venture, which would be valued at 70,350 crore ($8.5 billion) on a post-money basis.
The joint venture will combine media assets across entertainment (TV channels such as Colors, Star Plus, Star Gold) and sports (Star Sports and Sports18), along with content streaming on over-the-top platforms JioCinema and Hotstar, reaching more than 750 million viewers across India. It will also gain exclusive rights to distribute Disney films and productions in India, with a license to use more than 30,000 Disney content assets.
